Indonesian leader fires ministers of finance and security after deadly protests

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JAKARTA, Indonesia (AP) — Indonesia ’s president announced a Cabinet reshuffle Monday, replacing key economic and security ministers after deadly protests erupted across the country over lawmakers' perks.

The Cabinet shake-up comes as public dissatisfaction rose with President Prabowo Subianto’ s administration and parliament’s perceived insensitivity over economic hardships.

Five ministers lost their jobs, including Finance Minister Sri Mulyani Indrawati, a widely respected technocrat who had served as the executive director of the International Monetary Fund and managing director of the World Bank, and Budi Gunawan, the coordinating minister for politics and security.

Subianto chose economist Purbaya Yudhi Sadewa, chairman of the Deposit Insurance Corporation, to replace Indrawati, 63, one of Indonesia’s longest-serving finance ministers.

Violent protests had gripped Southeast Asia’s largest economy, home to more than 280 million people, after reports that all 580 members of the House of Representatives receive a monthly housing allowance of 50 million rupiah ($3,075), in addition to their salaries. The allowance, which was introduced last year, is nearly 10 times the minimum wage in Jakarta.

The National Commission on Human Rights, known as Komnas HAM, an independent institution, reported that 10 people died during the five-day protests, mostly because of inhumane approach by security forces in handling the demonstrations. Police reported the death toll at seven.

The protests grew more violent following the death of 21-year-old ride-hailing driver Affan Kurniawan. He was reportedly completing a food delivery order when an armored police car sped through a crowd of demonstrators and caused him to fall.

Indrawati's house in South Tangerang, just outside Jakarta, was looted on Aug. 31, alongside the homes of a number of lawmakers.

Analysts see the protests as a culmination of public anger over economic problems that the government has not addressed seriously, including widespread layoffs and declining purchasing power.

Calm largely returned after Subianto last week revoked lawmakers' perks and privileges, including the housing allowance, and suspended overseas trips.

Subianto also removed the ministers of cooperatives and the youth and sport, and Abdul Kadir Karding, the minister for migrant workers protection. He sparked controversy after a photo recently showed him playing dominoes with a former illegal logging suspect.

Indonesian stocks tumbled Monday after Subianto removed Indrawati from his Cabinet.

The Jakarta Composite Index closed down 1.28% at 7,766.85, shedding 100.5 points, while the rupiah strengthened 0.75% against the U.S. dollar to 16,309.

Indonesia remains attractive to investment, partly because Indrawati's strong credibility has been recognized both domestically and internationally for successfully maintaining a stable, prudent and sustainable fiscal policy, said Fadhil Hasan, a senior economist at the Institute for Development of Economics and Finance.

However, in recent years, Indrawati had accommodated many presidents’ ambitious programs, which resulting in increasing the government debt and diminishing the credibility of her own fiscal policy, Hasan added.

He said that Sadewa, Indrawati’s successor, was a capable economist but lacks a track record in managing fiscal and state finances. “So, I don’t think he’s the best choice,” he said.